SB589: Bill Text

SB589,38,4 (2) Any security interest taken in violation of this section is void and unenforceable, but shall not otherwise affect the validity of the consumer lease.

SB589,38,19 429.206 Realized value at lease termination. (1) If a consumer lease is terminated before the termination date set forth in the lease and, for a lease with an option to purchase, the lessee does not exercise the option to purchase, the holder shall act in a commercially reasonable manner when disposing of the leased vehicle or obtaining cash bids on the leased value for the purpose of establishing the vehicle's realized value. Within 5 business days of early termination of the consumer lease, a lessee who is not in default and, if applicable, does not exercise the option to purchase may obtain at his or her own expense a professional appraisal of the current wholesale value of the vehicle by an appraiser mutually agreeable to the lessee and the holder. An appraisal under this subsection shall be final and binding, and shall establish the vehicle's realized value for purposes of determining the liability of the lessee under the consumer lease. Nothing in this subsection shall be construed to prohibit the lessee and the lessor from mutually agreeing upon the vehicle's realized value, which shall be final and binding for purposes of determining the liability of the lessee under the consumer lease.

SB589,38,25 (2) Notwithstanding sub. (1), in the event of total loss or destruction of the leased vehicle occasioned by its theft, physical damage or other occurrence specified in the consumer lease prior to the termination date set forth in the consumer lease, the vehicle's realized value is the sum of the insurance proceeds from the applicable liability insurance policy required under the consumer lease or from any other party in payment for the loss or destruction, and any deductible amount under such policy.

SB589,39,2 429.207 Restrictions on early termination obligation. (1) The lessee has the right to terminate the consumer lease at any time.

SB589,39,6 (2) If a consumer lease is terminated before the termination date set forth in the consumer lease and no applicable option to purchase is exercised by the lessee, the early termination obligation of the lessee may not exceed an amount equal to the sum of the following amounts:

SB589,39,8 (a) Any unpaid lease payments that have accrued as of the date of termination of the consumer lease.

SB589,39,11 (b) Any other amounts unpaid by the lessee, other than excess mileage charges, arising under the terms of the consumer lease or permitted under this chapter or chs. 421 to 427.

SB589,39,13 (c) Any official fees and taxes imposed in connection with termination of the consumer lease.

SB589,39,17 (d) The amount set forth in the consumer lease as a disposition fee, not to exceed the average periodic lease charge. If the lease payment period for a consumer lease other than a single-payment lease is not monthly, the average periodic lease charge for purposes of this paragraph shall be computed on a monthly basis.

SB589,39,20 (e) The reasonable costs of retaking, storing, preparing for sale and selling the vehicle, to the extent that such costs would be recoverable as default charges under s. 422.413.

SB589,40,2 (f) Any amount by which the outstanding unpaid balance of the lease charge over the unexpired term of the lease exceeds the realized value. The outstanding unpaid balance of the lease charge may be calculated in accordance with any generally accepted accounting principles, except that this balance may be calculated on the basis of the adjusted capitalized cost for the unexpired term of the lease in accordance with generally accepted actuarial principles if the consumer lease provides for such calculation.

SB589,40,7 (3) A holder may credit against the balance of the lessee's early termination obligation any refundable security deposit or advance lease payments held by the holder. The excess of any refundable security deposit or advance lease payment over the amount of the lessee's early termination obligation shall be promptly returned to the lessee.

SB589,40,12 (4) This section does not limit or restrict the manner of calculating the lessee's early termination obligation, if such obligation does not exceed the amount calculated under sub. (2). Such manner may include calculation of the unamortized capitalized cost, or the discounted present value of remaining lease payments, multiples of monthly lease payments or payments on another periodic basis.

SB589,40,17 429.208 Assessment of excess wear and damage. (1) (a) Except as provided in par. (b), a holder shall, upon return of a leased vehicle, conduct an inspection to determine excess wear and damage to the vehicle for which the lessee may be held liable. A holder may not prohibit the lessee from being present at such inspection.

SB589,40,20 (b) If a lessee exercises an option to purchase in the consumer lease, the holder may not demand, collect or receive a charge for excess wear and damage to the vehicle and is not required to conduct the inspection under par. (a).

SB589,40,22 (2) Except as provided in subs. (4) and (5), a holder shall do all of the following not later than 60 days after return of the vehicle:

SB589,40,24 (b) Provide to the lessee an itemized bill meeting the requirements under sub. (3).

SB589,41,10 (c) Provide to the lessee a statement in substantially the following language: "You are being asked to pay this amount for excess wear and damage to the leased vehicle. If you do not agree with this amount and wish to preserve valuable rights, you must obtain and deliver to us, within 5 days after hand delivery or 7 days after mailing of this bill, an itemized counter-inspection, including an estimate of the cost of repairing such excess wear and damage from an appraiser agreed to by us and, if your lease has ended, payment of any excess wear and damage charges due under the inspection that you obtained. If you properly obtain and deliver such appraisal and tender any amounts due, such appraisal shall be binding on the holder. If you fail to do so, the holder's inspection shall be conclusive."

SB589,41,15 (d) For the purpose of obtaining a counter-inspection under sub. (5), allow the lessee access to the vehicle, at a reasonable time and place designated by the holder, for the applicable time period specified in the statement under par. (c). A holder is not required to deliver the vehicle to, or produce the vehicle at, a place designated by the lessee for the purpose of the counter-inspection.

SB589,41,23 (3) (a) The itemized bill specified in sub. (2) (b) shall be based on the inspection for excess wear and damage to the leased vehicle, and shall consist of a listing of items of excess wear and damage, together with a charge for each item. The itemized bill may be comprised of separate documents delivered or mailed separately, and may include identified charges for other amounts due under the consumer lease, such as excess mileage charges. A lessee does not assume liability for payment of any amounts due or acknowledge any item of excess wear and damage specified in an itemized bill by acknowledgement of receipt of the itemized bill.

SB589,41,25 (b) A holder is not required to provide to the lessee an itemized bill under sub. (2) with respect to a counter-inspection under sub. (5).

SB589,42,7 (4) (a) If a lessee is required under the consumer lease, or given the option by the lessor, to have a pretermination inspection by the holder of the leased vehicle for excess wear and damage, the holder shall provide at least 15 days' notice of such inspection to the lessee. A pretermination inspection under this paragraph may not be earlier than 15 days before the termination date set forth in the consumer lease. The notice shall specify that the holder's inspection after the termination of the lease shall be conclusive unless the lessee obtains a counter-inspection under sub. (5).

SB589,42,18 (b) A pretermination inspection under par. (a) shall be reasonable as to time and place. In addition to the statement under sub. (2) (c), any itemized bill of excess wear and damage prepared under par. (a) shall include a statement in substantially the following language: "If this inspection for excess wear and damage to the leased vehicle was conducted prior to the termination date under the consumer lease, you may avoid any excess wear and damage charges by having such items satisfactorily repaired prior to the return of the vehicle. The holder may inspect the vehicle at or after its return and may seek additional charges for excess wear and damage only by written notice to you, and only for excess wear and damage incurred after the date of that inspection. Any charges for excess wear and damage under this inspection or your own inspection shall be due when the lease terminates."

SB589,42,22 (5) (a) A lessee may, at his or her own expense, obtain a counter-inspection for excess wear and damage to the leased vehicle, within the applicable time period specified in the statement under sub. (2) (c). A counter-inspection is not valid under this section unless it satisfies all of the following requirements:

SB589,42,24 1. Is conducted by an inspector agreed to by the holder, with such agreement not to be unreasonably withheld by the holder.

SB589,43,3 2. Is in writing in a form provided by, or acceptable to, the holder, listing any items of excess wear and damage to the leased vehicle and, according to standards set forth in the consumer lease, the estimated cost of repair of such items.

SB589,43,4 3. Is delivered to the holder within the applicable time period.

SB589,43,7 4. If conducted after the vehicle is returned to the lessee, is accompanied by payment of the amount of such excess wear and damage charges listed on the counter-inspection.

SB589,43,10 (b) Absent a mathematical mistake or other obvious error, a holder shall accept the counter-inspection as conclusive of the lessee's excess wear and damage obligations under the consumer lease.

SB589,43,17 (c) The total amount of the excess wear and damage charges specified in a counter-inspection under par. (a) may not be increased at or after the termination of the lease, except to increase the lessee's excess wear and damage obligation to the extent that any excess wear and damage was obscured or concealed or is reasonably believed by the holder to have occurred after such inspection. Any increase under this paragraph is not valid unless the holder gives the lessee another itemized bill and statement meeting the requirements of subs. (2) and (3).

SB589,43,22 (6) A lessee shall not be in default on the consumer lease for failing to obtain a pretermination inspection or counter-inspection under this section, notwithstanding any contrary provision of the consumer lease. If a lessee does not obtain a pretermination inspection or counter-inspection, the itemized bill with respect to the inspection under sub. (1) shall be conclusive.

SB589,44,2 (7) (a) A holder may not demand, receive or collect a charge for excess wear and damage to the leased vehicle unless the holder substantially complies with this section. The exclusive penalty for failure to substantially comply with this section is a waiver of the right to collect all contested excess wear and damage charges from the lessee.

SB589,44,4 (b) A holder is not required to send any notice under this section if the holder does not wish to demand, receive or collect any excess wear and damage charges.

SB589,44,11 (c) Nothing in this section shall limit a lessee's obligation for excess mileage charges or prohibit any agreement between the lessee and the holder relating to excess wear and damage, if the agreement does not conflict with any of the lessee's rights under this section, or limit a lessee's liability to the holder for odometer tampering or for obscured or concealed structural or safety-related damage discovered by the holder after the return of the vehicle or the receipt of an itemized bill by the lessee.

SB589,44,15 429.209 Renegotiations and extensions. (1) All of the disclosure requirements specified in s. 429.203 apply to the renegotiation of a consumer lease. A renegotiation of a consumer lease does not create a warranty or subject the transaction to any laws of this state relating to the sale of used motor vehicles.

SB589,44,17 (2) The disclosure requirements specified in s. 429.203 do not apply to any extension of a consumer lease not exceeding 6 months in the aggregate.

SB589,44,19 subchapter iii penalties and remedies

SB589,44,22 429.301 Penalties and remedies. (1) Except as provided in s. 429.208 (7) (a), a person who commits a violation of this chapter is liable to the lessee in an amount equal to the sum of the following amounts:

SB589,44,23 (a) One hundred dollars.

SB589,44,25 (b) The actual damages, including any incidental and consequential damages, sustained by the lessee by reason of the violation.

SB589,45,3 (2) If a party to a consumer lease recovers damages or penalties under this chapter for an act or omission, the party may not recover any damages or penalties for the same act or omission under s. 218.01 or chs. 411 and 421 to 427.

SB589, s. 77 Section 77. Initial applicability.

SB589,45,6 (1) This act first applies to leases entered into on the effective date of this subsection.

SB589, s. 78 Section 78. Effective date.

SB589,45,9 (1) This act takes effect on the first day of the 5th month beginning after publication.

SB589,45,10 (End)